THE FAME GAME

As EV subsidies transition from FAME to EMPS and beyond, how is the industry coping?

- NITIN KUMAR

In July, electric vehicles sales in the country were nearly 28 per cent higher than in the previous month and the highest for a month in the current financial year, according to Vahan data from the Ministry of Road Transport and Highways. If you look at the calendar year 2024, EV sales have crossed a million in the first seven months.

The July sales, say experts, were driven by widespread discounts and customers hurrying their purchases. Both can be attributed to the imminent expiry, due on July 31, of the Electric Mobility Promotion Scheme (EMPS) 2024.

In a twist, though, the government has extended the EMPS by two months to the end of September. The scheme's outlay has gone up from ₹500 crore to ₹778 crore for subsidising electric two-and three-wheelers. This once again puts into focus how much the country's EV industry's fortunes are linked to the government's incentive schemes, even though EMPS, which replaced the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, has faced stiff challenges. As of July 15, only 8.6 per cent of the targeted vehicle sales had been realised since April 1, utilising just 3.8 per cent of the ₹500 crore outlay.

FAME era

The FAME scheme, launched in 2015 with an initial outlay of approximately ₹900 crore, was followed by FAME II, which had its outlay increased to 10,000 crore.

These schemes played a pivotal role in propelling the growth of the EV industry, driving sales from less than 7,000 units in 2014-15 (FY15) to 1.5 million units in FY24, constituting 6.8 per cent of all automobile sales. However, with the conclusion of FAME II in March 2024, the industry experienced a slowdown.

The government's efforts to promote electric vehicles also led to an increase in the number of players in the industry, from 124 in FY15 to 731 in FY24.